Naveen Zutshi's 6 Principles of Data-Driven IT

Until now, IT has never had easy access to data that would allow it to assess its own performance. It has thus had to operate in the dark, advocating for data-driven results and systems for the rest of the organization, but not for itself.

Now that is changing. There are powerful, new productized analytics platforms for systems of intelligence that allow IT to track and analyze its own performance just like any other part of the business. These solutions are more vertically oriented and deliver a much more detailed model of business activity and associated analytics, so that companies can start with a huge amount of work already done for them and build from there.

Yet because many companies are still unfamiliar with the technology, CIOs and other executives must work to understand what a high resolution IT-driven model would look like and how it can be used to increase the effective use of data across IT and the business, and achieve greater efficiency overall.

Zutshi acknowledges that IT has not done a great job of looking at itself as a business and understanding and tracking its activities at a detailed level, along with measuring the value of the investment in IT. His remedy is to focus on six areas that build on the increasingly large amount of data captured by IT and then provide detailed answers and visibility to allow you to constantly improve performance.

“We need to think about IT just as we would any other business,” Zutshi told me.

Focus Area 1: Stability is key

In assessing how well your IT is performing, you need to be able to judge the stability of your applications. To do this, Zutshi highly recommended using availability metrics that include measuring the number of changes made by IT and the impact of those changes. For development, you want to measure how many incidents were introduced by a new change or feature being released. He also emphasized keeping the customer experience in mind. “You need to look at how the customer is interacting with that application, what happens by introducing a new feature, and whether performance improves or degrades,” he said.

Focus Area 2: What’s the value over time?

Assessing the value IT is providing to the business over time is difficult, but Zutshi and I agreed it’s crucial that companies attempt to do this.

“The quantitative aspect of measuring value is really, really difficult,” he said. “One of the reasons is conflation.” He pointed out that if you see a bump in revenue based on a change made by IT, you can’t know for certain whether it was the result of the change or because of macroeconomics generally. But this challenge doesn’t mean you shouldn’t try to measure IT.

Zutshi said that one of things he has found effective is to break up the business into three areas based the Gartner model of Run, Transform, and Grow.

Run: Reducing the amount spent on run costs means the extra dollars can be reinvested in other transformational opportunities.

Transform: With transformation, you’re assessing the top business priorities and tying your top three or five IT initiatives to those priorities to demonstrate the impact IT had. While IT can’t claim credit for all value derived from a new product, if the product is successful, IT does deserve some. Additionally, Zutshi said that companies can assess IT’s transformational impact by looking at indicators such as macro level sales productivity and how the use of machine learning is helping the company be more agile.

Grow: Zutshi acknowledged that one of the key reasons IT often falls short is not just that they are not producing value, but also because there is the perception that IT is too slow and impeding the progress of others. So assessing growth is key. Companies can measure effectiveness as being an agile organization that is supporting the business needs.

Focus Area 3: What’s the customer’s take?

As I mentioned earlier, keeping the customer’s perspective at the forefront is a great way to judge the success of IT. Zutshi said this is one of the easier areas to measure. He recommended measuring:

The availability of systems over time

The number of open issues in a project or enhancement before it is put into production

A completeness measurement for apps, which is whether there are changes because the project was not correctly scoped from the get go

Technical and business debt

“From the customers’ perspective, they may see that a feature that should have been included from the beginning that wasn’t,” he said. “If we are doing iterative development on a given product, customers will be accepting, knowing that more features will be added. But if you have a project-based mentality and you finish a project and leave some things incomplete and move on to something else, then you are carrying additional technical and business debt. A key aspect of quality is to measure the technical and business debt,” he said.

Focus Area 4: What are the app rationalization opportunities?

Zutshi also recommended a data-driven approach to app rationalization. With companies often having hundreds of applications, they have to be able to trim these to ensure only those that are used and effective are kept in place. To optimize a company’s apps, Zutshi said businesses should look at:

Adoption metrics for apps

Incident and change metrics

Application performance metrics in an APM tool

Renewal cost of the application

Zutshi uses a solution from a systems of intelligence vendor to combine those metrics to demonstrate to the stakeholder why an application needs to be rationalized in favor of another application.

Focus Area 5: What’s the impact of a change?

Zutshi talked about the importance of measuring the impact of change in some of his other focus areas, but believed it deserves its own category as well. This would include measuring:

Impact on customers

The drivers of change failure, such as experience level

The track record of the team implementing the change

The type of environment that the changes are being made to

The estimated risk assessment level

Focus Area 6: Measuring application development performance

Zutshi’s final area for companies to focus on to improve IT was measuring application development performance over time. This unites app dev performance to release planning to make sure that projects that require configuration, integration, or development effort can be analyzed to reduce project execution risk, and then shorten lead times, enabling IT and its customers to realize the benefits of rationalizing.

Zutshi relies on the systems of intelligence solution to achieve what he needs to in these six areas and to leverage all of the data to understand how IT is performing. This may seem obvious, but for too long, IT has been treated like an art rather than a business. It’s time this changed.

“I think as CIOs, we have to demonstrate vulnerability and admit that we haven’t figured all this out and work at fixing it,” he said. “From my point of view, when I have this discussion on value creation and I ask my peers, how are you doing this in your organization, I get a variety of answers. Wouldn’t it be great if we had a really strong practice associated with how to do that in a seamless manner, in a less bureaucratic manner, and also capture it well to report it consistently to our business? But we haven’t done that until now. It’s time we did.”

My mission: Find technology for Early Adopters. Follow me: on Twitter @danwoodsearly on LinkedIn @ www.linkedin.com/in/danwoodsearly/ on myBlog @ https://earlyadopter.com. I am a CTO, writer, and consultant. For tech vendors, I help explain their technology. For users, I hel...